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2/21/2013 6:01:00 AM
Budget problems looming for Kingman
Recession's toll continues to be felt

Doug McMurdo
Miner Staff Reporter


KINGMAN - The city of Kingman will survive fiscal year 2012-2013 ending June 30, but its budget is headed for a crash in 2014.

So said Finance Director Coral Loyd at Tuesday's City Council meeting during a report on the city's second quarter financial situation.

"We did cut the budget to set up for a soft landing," she said.

Sales tax revenue is flat, the pools and parks department is bleeding red and the court system and planning and zoning department are in trouble.

Loyd's report provided a snapshot of the city's bleak financial situation in advance of a meeting today to discuss Kingman's capital improvements plan for 2014 through 2018.

Sales tax revenue for the last six months of 2012 was roughly $5.3 million, putting it on pace to match 2011 and 2012 totals of about $10.5 million, but about $1 million less than what was collected in 2009 and 2010 and $2 million less than in 2008.

The retail industry provides the bulk of sales tax revenue, about 47 percent or $2.9 million. The figure is roughly $100,000 more than what was collected in 2011.

Restaurants and bars chipped in the next highest total at 18.3 percent or $1.1 million. Hotels and other lodging sales tax contributed about $564,000, down nearly 7 percent from the prior year.

Transportation, communications and utilities came in at about $284,000, down a whopping 24.4 percent from the prior year.

Construction pitched in about $344,000, another nearly 7 percent drop.

Finance, insurance and real estate contributed $291,000. Wholesale trade came in with $215,000, about 4 percent less than in 2011.

On the upside, sales taxes generated by bars and restaurants were up more than 87 percent following a tax hike last year.

General fund revenues of about $22 million and expenses of $21.5 million leave a surplus of roughly $500,000. The figure is down about $600,000 from last year, but slightly up from 2011.

The city enjoyed surpluses ranging from $1.4 million in 2010 to $1.7 million in 2008, said Loyd.

Pools and parks took a huge chunk of revenue. Between July and December, the city collected about $53,000 in pools and park fees with operating expenses of roughly $960,000, leaving a $907,500 deficit.

The recreation department is also bleeding, but it's not hemorrhaging like pools and parks. About $73,000 was collected in fees with operating expenses of $221,200, leaving a deficit of roughly $148,000.

The golf course lost about $51,000, which is good news compared to previous years when it operated at deficits ranging from $77,400 in 2011 to about $132,000 in 2010.

Another money pit is the city's municipal court system. Fines paid the last six months totaled about $133,000 compared to operating expenses of more than $575,000, leaving a deficit of roughly $442,000.

The Planning and Zoning Department has seen its revenue shrink since the Great Recession hit. Over the last six months of 2012, the department collected $2,100 in fees compared with expenses of about $243,400. Planning and Zoning is in the red about $241,300.

The department has not come close to breaking even over the past four years, noted Loyd. In fiscal year 2009-2010, for example, $12,500 was collected in fees, but operating expenses were more than $308,000.

Building inspections yielded $165,000 in fees compared to operating expenses of about $280,000 - a deficit of about $116,000.

Like planning and zoning, the city managed to cut costs and lower the deficit for building inspections over the past four years.

The Highway User Revenue Fund collected a total of $1.3 million with operating expenses of about $1.5 million, leading to a deficit of nearly $200,000.

The KART bus system lost about $147,000 following revenues of $223,600 and expenses of $370,000 the first six months of 2012-13.

The city's water operating fund was a rare bright spot in Loyd's report, with revenues of about $4.3 million and expenses of about $3.2 million, leaving a balance of more than $1 million.

The sewer fund is also in good shape, with revenues of $3.4 million and expenses of about $2.5 million over the first six months of the fiscal year, leaving a balance of more than $888,000.

It's worth noting the steep increase in sewer costs levied against users added about $700,000 to the fund over fiscal year 2011-12.

"Next year, we could be in trouble," said Loyd. "Everything continues to be more challenging."

Those challenges, she said, could compel the City Council to either cut services or raise taxes - with no wiggle room in between.



KRMC - Optifast
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Reader Comments

Posted: Thursday, February 28, 2013
Article comment by: Fed up with Government

A big part of the budget woes for both City and County is the FACT that neither Government Entity spends local. Every Construction project that both the City and County have done have been given to OUT OF STATE CONTRACTORS who in-turn use their sub -contractors and so on, which means that all the hundreds of thousands of dollars they are spending is going to other states and their City's and Counties not Mohave or Kingman. believe it or not it doesn't take a Masters degree to figure that out, and then when the budget supposedly falls short they do what ever they need to raise prices on the locals living here. it's as simple as that. There is a lot of mis-used funds in both City and County but who is held accountable? and how does it get changed?

Posted: Wednesday, February 27, 2013
Article comment by: new golfcarts

The golf carts are true. Kramer has purchased a new fleet of golf carts. They are not leased they are purchased. Kramer has always sunk money into the golf course. Where else can he play golf with his buddies from the Elks Lodge and enjoy his huge salary?

Posted: Tuesday, February 26, 2013
Article comment by: You Go, Girl

I certainly agree with Old D. Woman.

Posted: Tuesday, February 26, 2013
Article comment by: Top Needs Examination

Truth Teller tells the truth. Again, since the city manager isn't going to do anything about the top, it is the council's responsibility. Council, how about monitoring the department heads. Oh, that's right the manager won't let you. Well then ask for a detailed (and detailed means minute-by-minute) accounting of exactly what the top management does all day, every day.

Posted: Tuesday, February 26, 2013
Article comment by: New Residents - Good or Bad News at 11

Rodger the Dodger, exactly how are newcomers going to hurt our "politics". I need to know if I'm all for them or want them to stay out of our wonderful, prosperous, upscale utopia.

Posted: Tuesday, February 26, 2013
Article comment by: Sell Golf Course

Uncommon S, there actually was mention of the golf cart expenditure. I think the powers-to-be wanted to get that little "problem" settled before the bottom fell out. You know the golf course crowd has to have their course and all that comes with it while the rest of us pay for it.

Posted: Tuesday, February 26, 2013
Article comment by: Walk the Beat Saves $$. Reduces Waistlines

Actually let's go a bit further with the cops - those responsible for the downtown should get out of their cars altogether and walk the beat. This would virtually eliminate crime downtown, and present a "friendlier" facet to visitors.

Posted: Monday, February 25, 2013
Article comment by: anonymous anonymous

I do love the geniuses here advocating less than 40 hour work weeks as cure for economic woes, if one cannot find minimum of 40 hours a week in my hey day before I retired one sought a second job, and in my hey day I had two jobs on average first one 40 to 60 hours, second one filled the weekends with a extra 24 hours, so I worked minimum 64 to 84 hours a week, but in this economy where 1 job has 5 applicants its a bit amusing to read these on line geniuses with their wisdom, advice doubt they are fit to give anyone any advice let alone fix the economy, if they were so smart they would be rich not whining about paying taxes or whose on welfare!

Posted: Monday, February 25, 2013
Article comment by: This is the New AMERICA

The City of Kingman has become just another American corporation paying upper level managers wages that are way out of line. You see the idea in business is to pay your workers a modest wage that way, they can't leave the job. They live check to check. But you watch the upper level folks leave their positions. They've been able most likely to save, pay off homes, build reconnections elsewhere. City Counsel don't pay these wages anymore or you won't be able to hang on to your upper level managers when you really need them in economics hard times. Overall your doing a good job but times are changing be the first to set the example and stand up for us.

Posted: Monday, February 25, 2013
Article comment by: Old Desert Woman

Big problem is that elected officials get to set their own salaries. I believe the law should set officials salaries at not more than 100% of median income of the area they serve. They will then have a closer view of what the reality is for the working class.

Gold carts? The golf course should be privatized and the pools and parks supported.



Posted: Monday, February 25, 2013
Article comment by: sales taxes are flat .....

just what I predicted would happen, despite what some here said at the time. Everyone seems to have heard of the "scientific experiment" where frogs are put in water which is gradually raised to the boiling point - except that it is not true. The frogs will actually hop out of the water before boiling to death. So going out to dinner "only" costs a little more this time around? Well, that comes on top of retail prices, tips, the cost of gas to get there, and all our other bills and prior tax increases. So go ahead and keep raising taxes, and we'll go from "flat" to "downhill". I'm surprised it hasn't happened yet.

Posted: Monday, February 25, 2013
Article comment by: Im making it

I suggest the city trains itself as I had to. Over the last few years Ive had to Pay myself last to ensure I survive each month.

Apply this to the city....Top officials pay themselves last and absorb the hardships AFTER the bills are covered.

As a former businessman. Many times I went hungry to pay my employees first. Most small business people do waiting for invoices to be
paid.

Let the top take the heat.


Posted: Sunday, February 24, 2013
Article comment by: Close the Golf Course!!

How is the golf course regarded as a necessity? It's a money pit! Either close it, sell it or increase the rates to use it to a level that will pay for it! The majority of the citizens paying for this money pit don't use the golf course so who is the city to say we have to subsidize it's continued operation for the few who do use it?

Posted: Saturday, February 23, 2013
Article comment by: jk onyu

The employees of the city are some of the hardest working that I have ever met. I struggle to find substance when I see comments about how little the employees of the city are valued by the citizenry. Primarily this is because I am one. I have worked diligently protecting the citizens of this area for many years without even marginal increases in compensation (not even keeping pace with inflation) and drastic increases in retirement contributions as well as costs of our travesty of a health insurance plan. I empathize with those in private industry who have felt the same burden, but I have none for those who take pot shots from the sidelines and don't realize that their tax burden is among the lowest in the nation. Good luck with retaining quality employees.

Posted: Saturday, February 23, 2013
Article comment by: truth teller

This city is top heavy the supervisors and Administrators make 3 times their workers salaries. Most of them work average 24-30 hrs a week !! Wages for the workers have been Frozen for 5 years

Posted: Friday, February 22, 2013
Article comment by: V Stokes

@ Uncommon Sense
Maybe I'm reading the minutes of the Council meeting wrong...but it appears to me that they voted to approve Staff recommendation to NOT lease the new carts?

If they had...I'm sure it would have been mentioned.....at least I hope it would have been.


Posted: Friday, February 22, 2013
Article comment by: V Stokes

"How about making most city employees work 32 hours a week but same pay"??

Well...heck...I think any employee would love that. 4 day work week for the same pay? Woo Hoo! 3 day weekend every week...and sometimes 4!

Oh did you mean hourly workers? Tell me how you'd feel with a 20% pay cut. Could you pay your bills on that?


Posted: Friday, February 22, 2013
Article comment by: Rodger The Dodger

Very complicated issue here, not able to mention all possible fixes in the word limit here. First off we have a large amount of new citizens moving here, after losing jobs in other states. Senseless moving here when we have so few jobs. Many are coming here due to political leanings, but they will actually hurt our politics. There are just not enough jobs here, so they will add burden to our economy. Also new census will not be taken till 2020, Kingman will slip through the cracks.
We will need to cut budget in a large amount. Only thing I can think of is slowing the purchase of new land and no new vehicles. Would suggest losing some employees, except They contribute to city economy.
Seniors are important, bringing fed money. Odd, the new health care nationwide plan could help us as well.
Oh, another moneymaker, tried & true, is an impact fee for new vehicles coming out of state, & registering.


Posted: Thursday, February 21, 2013
Article comment by: Uncommon Sense

Is that why Jack Kramer purchased 60 brand new golf carts for the golf course? Because the defecit was lower than last year for the golf course so he figured nobody would notice. I don't see any articles in the paper about that.

Posted: Thursday, February 21, 2013
Article comment by: H J

Reason for the budget shortfall is people just don't have the money! Raising taxes makes even less sense. Our taxes were raised for our roads which still are a mess! All levels of gov't. & both parties are completely out of control
They have no interest at all for the people they claim to represent! Last year all we heard was jobs, jobs. Now cuts,
Cuts, causing more to be without jobs and raising taxes when we can't afford it!


Posted: Thursday, February 21, 2013
Article comment by: Can I Have This Dance

Well done McMurdo -- since Kingman is such an excellent shovel-ready pile, you should be able to dig up some excellent gems.

Since there has always been superb wiggle-room in the water budget, we certainly might expect more inter-fund transfers to help keep our other struggling city bureaucrats afloat.

I mean, just look how the entire engineering dept. falls under the water budget -- should be room for Parks and Rec. to slide in there alongside since they get free water to boot -- just elbow over the golf course a wee tad -- there’s plenty of room. Makes one wonder just how many teats our water wizard has.

Don’t you just love the budget “soft landing” quip? City has no trouble since they have their landing gear lined up on utility ratepayers and taxpayer’s wallets -- nice wide and long zone where they have left several skid marks the last few years, with more to come. Just a little “Touch and Go” practice they have wholly mastered.

And finally, that adorable “Next year, we could be in trouble” line -- that’s the yearly setup for the inevitable -- “Watch your wallet, folks!” local tea berry shuffle. Darned if it’s not like a square dance where you get all dizzy from going around in circles -- again -- and again -- and again.


Posted: Thursday, February 21, 2013
Article comment by: Bob Bob

The city needs to be run like any other business and live with in a budget. If an area looses money cut expenses, contract out service or eliminate non essential services. The city needs to tighten its belt and live with its means not just raise taxes .

Posted: Thursday, February 21, 2013
Article comment by: Rick O'Shea

I still find it funny that the mayor and city council support taxing the heck out of businesses and the taxpayers to keep their status quo. While other cities are laying off and cutting hours, our city keeps on going as if this area is made of money. How about making those police officers drive their own cars to and from work, how many thousands of gallons of gasoline would that save the city. How about making most city employees work 32 hours a week but same pay, the cost saved on electricity and water use alone would be quit a sum of taxpayer cash. I think our problems here are mainly due to locals only in elected positions.

Posted: Thursday, February 21, 2013
Article comment by: anonymous anonymous

I own property in Mohave county, undeveloped property which will remain so as long as Mohave county remains GOP dominated, the fiscal geniuses who run norhtern Arizona are like the naitonal ones fiscal geniuses in name only! 2000-2008 reminded me why during 1928 Herbert Hoovers famous saying of let the free market fix it is a old tired and useless way to fix anything and never works!

Posted: Thursday, February 21, 2013
Article comment by: Nip It

@ City - Why aren't cuts made in each offending department in the following year that deficits show up, instead of waiting years later to do something about it?
Departments that are creative enough to save money for taxpayers by increasing their effectiveness while decreasing (or at least, not increasing, their costs) could be rewarded by having a MODEST budget increase or other incentive each year they produce positive results.



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